Lithium Iron Phosphate Batteries Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Lithium Iron Phosphate Batteries Market is Segmented By Type (Portable, Stationary), By Capacity (0–16,250 Mah, 16,251–50,000 Mah, 50,001–100,000 Mah, 100,001–540,000 Mah), By Application (Automotive, Power, Industrial, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2023-2030

Lithium Iron Phosphate Batteries Market Size

The Global Lithium Iron Phosphate Batteries Market reached USD 12.2 billion in 2022 and is expected to reach USD 31.3 billion by 2030, growing with a CAGR of 12.5% during the forecast period 2023-2030. The global lithium iron phosphate batteries market witnessed increasing demand from Asia-Pacific as domestic car markers ramp up EV production and increase exports to other markets. 

Increasing industrial automation will also create demand for lithium iron phosphate batteries, especially from the manufacturing industry. Due to their high energy density, the batteries are widely used in industrial robotic systems. In April 2023, researchers from Massey University in New Zealand unveiled a solar-powered robotic lawn mower that utilized 20Ah lithium iron phosphate batteries for power backup. 

Lithium iron phosphate battery manufacturers will likely increase new product launches targeted at utility-scale energy storage applications during the forecast period. For instance, in February 2023, Our Next Energy, a U.S.-based battery tech startup, launched Aries Grid, a lithium iron phosphate utility-scale battery system. The system will be available in 2, 3 and 6 MWh options, with full-scale production commencing in early 2024. 

Lithium Iron Phosphate Batteries Market Scope

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Lithium Iron Phosphate Batteries Market Dynamics

Falling Prices of Electric Vehicles (EVs)

Due to new technological breakthroughs, robust supply chains and economies of scale, the prices of electric vehicles have exhibited a major fall in recent years, making them more affordable for consumers across a broader range of incomes. Electric vehicle battery prices have declined from nearly USD 1200/kWh in 2010 to less than USD 100/kWh in 2023. 

It is estimated that in 2023, prices of electric vehicles will match that of their gasoline counterparts in developed markets such as the U.S. For instance, the average cost of a 350-mile range EV in the U.S. was USD 50,000 in 2019 and is expected to halve to nearly USD 26,000 by the end of 2023. A steeper fall in EV prices is predicted to occur in the upcoming years. The fall in prices of EVs increases their affordability, thereby augmenting the demand for lithium iron phosphate batteries.

Rising Adoption of Grid-Scale Energy Storage Solutions

Renewable energy systems such as solar energy have recently witnessed increased adoption. However, due to the intermittent nature of solar energy, grid-scale energy storage solutions are being adopted to provide uninterrupted clean energy. Electricity grid operators are implementing energy storage projects to improve grid stability, especially due to a growing share of renewables in the energy grid. 

For instance, in June 2023, UK’s National Grid ESO announced that it was speeding up grid connections to energy storage projects. Lithium iron phosphate batteries provide an efficient and reliable energy storage solution, enabling the storage of excess renewable energy generated during periods of high production and releasing it during peak demand. 

The shortfall in Global Lithium Production

Global lithium mine output has quadrupled from roughly 28,000 tons in 2010 to over 100,000 tons in 2022. However, based on rising demand projections, mainly on the back of rising electronics and electric vehicle production, it is forecasted that lithium production must increase nearly sixfold by 2030 to keep up with growing demand. It has created supply-side pressure to exploit more lithium reserves.

Given the difficulty in commercially exploiting known reserves, new capacity is unlikely to come online soon enough to meet growing demand. The technology to refine lithium is also concentrated within a few countries, leading to further supply constraints. Therefore, demand for replacement remains low within the various end-user industries.   

Lithium Iron Phosphate Batteries Market Segment Analysis

The Global Lithium Iron Phosphate Batteries Market is segmented based on type, capacity, application and region.

Higher Performance Characteristics Makes Lithium Iron Phosphate Batteries A Key Choice for the Automotive Industry

The automotive industry accounts for nearly half of the global demand for lithium iron phosphate batteries. The batteries have a relatively high energy density, allowing them to store significant energy in a compact and lightweight package. It is crucial for EVs as it enables longer driving ranges and more efficient use of space within the vehicle, contributing to improved overall performance. 

Furthermore, the batteries perform well across a wide range of temperatures and can handle high charge and discharge rates, thus increasing convenience for EV owners. Longevity and durability is other crucial factor, as lithium iron phosphate chemistry batteries can handle thousands of cycles, thus providing extended lifespan for electric vehicles and reducing the requirement for battery replacement.  

Source: DataM Intelligence Analysis (2023)

Global Lithium Iron Phosphate Batteries Market Geographical Share

Explosive Growth of Chinese EV Manufacturing To Propel Market Growth In Asia-Pacific 

Asia-Pacific accounts for the largest share in the Global Lithium Iron Phosphate Batteries Market. Global electric vehicle (EV) production surpassed 10 million for the first time in 2022, with China accounting for more than a third of the worldwide production, with more than 3.2 million electric vehicles produced in 2022. Chinese brand BYD had nearly 1.8 million cars, a 211% increase from the year before.    

China also accounted for nearly 35% of global electric vehicle exports in 2022. Lithium iron phosphate batteries are mainly used for electric light-duty vehicles (LDVs). According to data from the International Energy Agency (IEA), around 95% of global lithium iron phosphate batteries produced for LDVs went into vehicles made in China. 

Although China is the leading producer in the region, other countries are tweaking their policies to encourage more electric vehicle production. For instance, the Indian government has rolled out FAME-II subsidies to promote the production of electric cars and motorbikes in the country to indigenize the supply chain for electric vehicles fully.   

Source: DataM Intelligence Analysis (2023)

Lithium Iron Phosphate Batteries Market Companies

The major global players include BYD, K2 Energy, Relion, A123 Systems, Pihsiang Energy Technology, Lithium Werks, Optimumnano Energy, Taico, Victron Energy and Contemporary Amperex Technology.

COVID-19 Impact on Lithium Iron Phosphate Batteries Market 

COVID-19 Impact

The COVID-19 pandemic created major challenges for the global lithium iron phosphate batteries market as major end-users like the automotive and power industries faced production disruption, thus leading to reduced demand. Another major factor affecting battery production was shortage of critical components as the pandemic disrupted global supply chains. 

However, as mass vaccination led to the receding of COVID-19 cases, government lifted pandemic restrictions and industries started to ramp up production to reach full capacity. Although battery manufacturers are expected to capitalize on the rising demand, some supply chain problems still affect their ability to quickly ramp up production.  

AI Impact

One of the major applications of artificial intelligence (AI) for lithium iron phosphate batteries will be the development of smart battery management systems. AI-enabled battery management systems have the potential to reduce performance degradation over time and prolong operational battery life. Furthermore, the AI-enabled system can be used to preempt catastrophic battery failure, thus preventing accidents and loss of life. 

Another more beneficial aspect of AI-enabled battery management systems could be significant reduction in charging times due to optimization of the battery charging process. However, AI-enabled technologies could be used to assist in research and development of new batteries. For instance, battery composition could be modified to increase energy density and reduce the form factor of batteries, making them suitable for a wider range of applications. 

Ukraine-Russia War Impact

The Ukraine-Russia war caused disruption of energy flows to Europe, as the European Union (EU) and U.S. imposed sanctions on Russia due to the war. Europe has reoriented itself to source alternative energy suppliers. Europe is also undertaking expansion of renewable energy systems and investing in the development of electric vehicles.    

In March 2023, the European parliament passed a landmark bill which mandates that all new cars sold in Europe from 2035 should be zero emission vehicles. The new bill is expected to augment electric vehicle (EV) production in Europe, thus raising the demand for lithium iron phosphate batteries in the region over the long term. 

By Type

• Portable 
• Stationary

By Capacity

• 0–16,250 Mah
• 16,251–50,000 Mah
• 50,001–100,000 Mah
• 100,001–540,000 Mah

By Application

• Automotive
• Power
• Industrial
• Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • The UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In May 2023, Sofar, a Chinese battery manufacturer, unveiled PowerMaster, a new utility-scale lithium iron phosphate battery with modular construction. The battery has a capacity of 3.44 MWh and is equipped with 280 Ah cells.
• In June 2023,  Avenira, an Australian battery components manufacturer, announced the commencement of production at a new lithium iron phosphate battery cathode manufacturing facility in Darwin, Australia.  
• In April 2023, TronTek, an Indian battery manufacturer, announced the launch of its first lithium iron phosphate battery. The battery has obtained certifications for electric vehicle battery standards set by the Ministry of Road Transport and Highways (MoRTH) of the government of India. 

Why Purchase the Report?

• To visualize the Global Lithium Iron Phosphate Batteries Market segmentation based on type, capacity, application and region and understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development. 
• Excel data sheet with numerous data points of lithium iron phosphate batteries market level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The Global Lithium Iron Phosphate Batteries Market Report Would Provide Approximately 57 Tables, 58 Figures And 195 Pages.

Target Audience 2023

• Mining Companies
• End-User Companies
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies